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APRIL 2022
Invest where you work
Working for a thriving company is a good feeling. You’re part of a winning team. Your hard work is making a difference. And at Costco, there’s something else to feel good about: You can share in the profits you helped build — through the Employee Stock Purchase Plan (ESPP).
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What is an ESPP?
The employee stock purchase plan, or ESPP, is a benefit Costco* offers that allows employees to buy shares of company stock without having to pay commissions. In Costco’s case, fees and commission for these purchases are fully paid by Costco. Employees who choose to participate generally make contributions to the plan through payroll deductions. The deductions are held in the plan until a set purchase date. At that point, they’re invested in the company’s stock.
*At Costco, employees who are 18 or older are generally eligible to participate. Participation in the ESPP is entirely voluntary.
What are the advantages of an ESPP?
With an ESPP, the brokerage fees and commission are paid by Costco. Brokerage fees and commission can be as high as 2% of the stock price. So, for example, if you buy ten shares of Costco stock at $500 per share, the fees and commission would be around $100.
When participants enroll, they can choose either a percentage or flat dollar amount to be withheld from their paychecks. These deductions accumulate during the offer period. Then, on set purchase dates, the company uses the funds to buy stock for plan participants.
A qualified ESPP can offer some tax benefits. When you sell the stock:
- If the stock has increased in value, the gain will also be taxed as ordinary income.
- If you hold the stock for more than a year, it will be taxed at the typically lower capital gains rate.
Source: NerdWallet. ESPP: What to know about employee stock purchase plans.
The following resources are available to help you learn more about your Costco Employee Stock Purchase Plan. These resources are confidential and available to you at no extra cost.
Resources for you
To learn more about, or enroll in the Costco ESPP, visit Costcobenefits.com and select Financial Wellbeing> Employee Stock Purchase Plan (ESPP).
To learn more about, or enroll in the Costco ESPP, visit Costcobenefits.com and select Financial Wellbeing> Employee Stock Purchase Plan (ESPP).
To learn more about, or enroll in the Costco ESPP, visit Costcobenefits.com and select Financial Wellbeing> Employee Stock Purchase Plan (ESPP).